Bi-weekly schedule
For months where there are three bi-weekly paychecks, flat dollar amount deductions should not be taken from the paycheck on the third payday. The three bi-weekly pay months where flat deductions are not taken are referred to as benefit "holidays".
Forma recommends including details about contributions on three paycheck months in your employee benefit materials.
There are 53 weeks in 2026. With a bi-weekly pay schedule on Wednesday starting January 14th, 2026, in July, employees will receive three paychecks. It is recommended not to make deductions on the extra paycheck especially for Transit and Parking.
Weekly schedule
If you're on a weekly schedule, in months with five paychecks, typically the 5th paycheck doesn't include deductions for contributions.
For example, there are 52 weeks in 2025, and five Wednesdays in January 2025. The pay frequency is on Wednesday, weekly.
- John will contribute the same amount to his DCFSA each pay period, by the end of the plan year, he will not over or under contribute with 52 payroll dates.
- John’s monthly Transit election is $280, with a pay period election=$280/4 weeks=$70.
- In January, if the auto-deposit calendar processes the 5th contribution on January 29th, it will bring the monthly contributions to $70*5=$350 and be over the IRS limit.
- Even when the pay period election is calculated as $280*12 months / 52 weeks=$64.61, the 5th contribution will exceed the monthly limit. This calculation method is not recommended because it will not meet John’s monthly election in a 4-week month either. Ultimately it’s your decision how to calculate the deduction amount per payroll, but it is recommended not to make deductions on an extra pay cycle.
Others Notes
- Parking and Transit accounts have a monthly pre-tax contribution maximum. Pay period election is calculated based on monthly election. On a weekly or bi-weekly auto-deposit schedule where there is an additional payroll date, the monthly election may exceed the limit. It is the employer’s responsibility to ensure contribution limits aren’t exceeded.
- Section 125 cafeteria plan regulations that govern employee pre-tax contributions also require that the interval for employee salary reductions be uniform for all participants. This means employees cannot pay contributions at different intervals (e.g., one pays each paycheck while one pays each month) or pays different contribution amounts ($300 one pay period, $200 the next pay period).
- Please share details with Forma about how the third or fifth paycheck months are handled so we can align the auto-deposit calendar accordingly.